The purpose of buying a health insurance policy is to ensure that hospital ...
The common saying goes that New Year Resolutions are meant to be broken…
- Stop smoking
- Increase Family Time
- No fighting with Spouse
- Start Exercising, etc. etc.
So, this year, we shall not talk about some regular New Year Resolutions that you make every year and break them before the first month or the first week of January ends! This year we shall talk of Financial New Year Resolutions, which is better kept than broken…. For your better future, for your piece of mind..
And once these New Year Resolutions are kept, all your Financial Worries are going to fly out of the window and you will surely have a GREAT year ahead!
After asking a sample size of 50 people, MyInsuranceClub has come to the top 9 basic Financial Concerns of an individual, not in any order:
1. Proper Financial Planning:
The biggest concern in today’s generation is Proper Financial Planning because of steep rise in Lifestyle and Inflation eating out of their pie. So most 30 to 40 year olds have a major worry of making ends meet because having a smart phone, AC, new car, LCD, etc. have almost become a necessity and a status symbol and hence people are stressed to keep pace with the fast moving world.
Most people have confirmed that Proper Financial Planning would ease a lot of their financial worries. Anirban Majumbar, Senior Associate, Cognizant Technologies has confirmed that Proper and Professional Financial Planning with Inflation incorporated will ease 80% of his Financial Worries. He is a very pro-active investor who has sufficient Life and Health Insurance coverage but he still feels the lack of Professional help which might provide him a deeper insight of the future and in turn help him with a meaningful planning.
2. Individual Health Plan:
Most salaried employees have Health Insurance coverage from office provided Group Insurance but do not have an Individual Policy despite the awareness. Thus, even though the need, the awareness and the affordability is there, opting for an Individual Health Plan has low priority till such time that some illness has been contracted or the pinch in the pocket becomes heavy.
3. Critical Health Plan:
This type of plan is not an indemnity plan as this plan pays the Sum Assured on diagnosis of any of the mentioned Critical Illnesses irrespective of how much being spent on the treatment. Thus, this plan pays the entire Lumpsum amount on diagnosis. This plan was not very popular before but now has gained considerable interest in the last few years.
4. Monthly Investments:
Regular Monthly Investments is something that most people plan to but very few people actually end up doing so. Most 30’ somethings are very focused about Monthly Savings but Investing the same to beat Inflation and properly plan for the future is something that isn’t very predominant yet. And hence the Investment Ratio in India is yet so low with such exposure in Cash Transactions.
Sariputra Mutsuddi, Branch Manager at LIC of India stated that in today’s scenario most Investments are either in Lumpsum or Single and that too it isn’t very well planned. He has taken up loads of Insurance Policies for himself and his family but is yet to receive proper and professional Financial Planning with which he can start a regular Monthly Investment for the future.
5. Tax Planning:
The most interesting aspect about the youth of India is that they do not plan for their tax, they simply pay whatever needs to be paid. There are so many aspects of Taxation that people are hardly aware of and if planned properly the tax liability can be spread out and reduced by a large amount.
Arvind Sinha, an independent Tax Consultant says that most of his high profile clients are very happy with him because he knows the tax norms and can help them by reducing their tax liability under the various sections. For example, the real understanding of Wealth Tax, Property Tax, Gift Tax, etc. as well as Tax Rebates possible under section 37B, 80D, etc. are very useful and effective tips for proper and sound Financial Planning. This is most helpful for people who are either small or medium scale entrepreneurs or have multiple properties and gets rent income.
6. Retirement Planning:
Retirement Planning is still a very under exposed area in the youth of India. With the sudden rise in Lifestyle, Expenses and Outlook, people are not even aware of how much would be their expenses Post Retirement and hence Planning becomes almost non-existent. Once the real concept of Inflation enters a person’s mind, he would be able to estimate his Post-Retirement Expenses and not before that.
Sumit Roy, Head, Project Management Office, MSR IT Solutions says that he knows the importance of Retirement Planning but hasn’t been inclined to start saving for the purpose of the same. He saves and invests enough for his family not specifically for the purpose of Retirement. He knows he needs to start on the same yet to reap maximum benefits of the Power of Compounding and the Rupee Cost Averaging as he still has a horizon of more than 25 years, but if he doesn’t start fast enough, he would not be able to get the “early bird benefits”!
7. Child Education:
This again is a very important concern at least for new parents. With a couple of year old children, it becomes of primary importance but the same if not held on for a long tenure loses its value. Child Education Plan is something that everyone wants to get the best and would never compromise. However, the same needs to be very categorically planned as Educational Inflation is much higher than the regular inflation pegged at 8-9%. The school and college fees have more than tripled in the last 2 decades and are expected to rise beyond 15% in the next 2 decades. So, unless you pull up your socks, your child might not be eligible for formal higher education at all!
8. Parent’s Health Plan:
This is most people’s weakest thread. Some of them have regretfully agreed that they are ready to pay any amount of premium if their parents can avail any Health Insurance Coverage but they are not being accepted by any Insurance Company due to their Pre-Existing Illnesses like Heart Attack or any Ailment, Prolonged Diabetes, Stroke, etc.
Hence, if any of the parents can get any Senior Citizen Health Plan even with high premium or some exclusion, the same is still worth it because that saves some amount of pinch amidst the hospitalization worries and the Health Insurance Premium can be claimed for Tax Rebate under section 80D for any additional Rs 20000 for Senior Citizen parents!
Thus, we should learn our lessons from our elders and avail the earliest possible good Health Plan by weighing the pros and cons and then continuing the same so that we do not out our children in the same boat!
9. Protection against Loan:
Well, like in the US, even India has become pro-active towards assets under loans even if that is for a miniscule degree and especially for home loans. In fact, even Personal Loans and Car Loans have become quite predominant but not to the extent of the Home Loans as there is Tax Exemption on the same as well over and above the 80C limit. However, if there is not enough coverage for the Loan or your Life, then that is an area of concern!
Thus, if all these 9 Basic Financial Concerns are addresses, we at MyInsuranceClub can guarantee that your New Year will surely be a VERY good one indeed and don’t forget to let us know your take on the same!
And yes, a very Happy New Year too….
Looking forward to hearing from you and take care…